How is it possible that every car insurance company promises savings by switching from their competitors?

Obviously, if every company could save you a bundle over every other company, the insurance industry would go belly-up in a matter of months. But since advertisers are not supposed to promise you something that they have no intention of delivering, how is it that you can switch insurance companies and save no money, but the insurance company does not go bankrupt? The basic answer is simple, but the long answer includes some factors you probably never considered before.

The simple answer is that insurance companies can save you money by switching because they offer special "teaser" rates to people to switch from other companies. At first, the savings is apparent and real, but after a certain amount of time you will begin to see your premiums increasing. You did get cheaper rates, usually for 6 months or more, but in the long run you will end up paying something close to the same amount for the same coverage.

On the other hand, car insurance companies are definitely competing for your business, and it is possible to get longer rates that stick with you for years. To do this, insurers offer "discounts" to their customers, and each company has a different set of discounts available plus a variable discount rate for each one. So, not only can you save money by switching insurance companies and getting the teaser rates, you can continue to save money by choosing an insurance company that offers more discounts related to you and your style of life. For example, if two insurance policies are equally priced, but one company gives you a discount for being a teacher, then you really can save money by switching companies.

To get an idea of how much you can save, and what a policy is going to cost, use a free online car insurance quote. Once you have tailored a policy to fit your car and driving habits, and gotten the discounts that you are eligible for, you can compare the premium cost of insurance between multiple companies and get an idea of how much variability there is in what you pay for car insurance.